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Becker Private Equity & Business Podcast
A Tale of Two Economies: The Rich and the Poor 10-9-25
00:04:45
In this episode, Scott Becker explores the widening divide between Americans with assets who benefit from a booming market and those without who bear the full weight of inflation.
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This is Scott Becker with the Becker Business Podcast and the Becker Private Equity Podcast. Today's discussion is a tale of two economies, the rich and the poor. So here's the deal with today's discussion. I had a conversation with a brilliant surgeon today who asked me why people aren't as worried about inflation as they should be. And the perspective she brought to the table was instruments. Everything that they use in practice, the prices are all going up. And so the discussion led to a different discussion around the very bifurcated economy that we have. And here's the simple stats, and it's very similar, interestingly enough, with how stats break down for hospitals and health systems. But the stats for our country are about 60% of people some way or another own some assets, some stocks, some investments. And what's happened with the stock market being on fire, that part of the economy is feeling at least some of the wealth effect. And of course that's not evenly distributed. So the people that, that are at the top of that 60%, I don't know what percentage is half of that, 20% of that, whatever the number is, are doing really well as market assets keep on going up and as the stock market keeps on rising. So you could deal with the fact that inflation for someone my age, like dinner out for 2 or 4 has become 2 or 3 or 4x the number it was not that long ago. You know, just the cost of drinks, the cost of dinner, everything's going up astronomically. Where what used to feel like a fifty dollar nights, now $150 night when you're going out for a serious, serious night's dinner. And just even the places that were value places are just much more expensive. Now if you're part of the asset class, the 60% that owns assets, investment securities, you feel it. But you also could sort of rationalize it because your balance sheet is going in the right direction. The flip side is, you have to remember is that we've got a very bifurcated situation. There's another 40% of people in our country that literally have no investable assets. They that means they're getting all the pain of the economy changing and disrupting, meaning wages starting to flatten, inflation up, the cost, everything up, but not the flip side of the benefit of having assets to sort of outweigh or weigh in against that increased cost of daily life. So you've got this incredibly difficult, challenging situation, really a tale of two economies. And when you look at that tale to economies, it's no wonder that there are politicians that are preaching socialist concepts that are, that are attractive to a lot of people. Because if, you know, if you own no assets and somebody else is talking about redistribution or different way of doing business or an economy, if you have no assets, I assume there's a part of that that's quite attractive to you. And it doesn't mean you're lazy. It doesn't mean you want somebody else's thing. It just, you view it as this economy has not worked for you, even though it's worked for others. It's what leads to all these very difficult politics and situations. I don't know the answer to that. I am a believer that capitalism is the best way of doing business, but it is flawed. And when it gets too flawed, you end up with challenges. And we could be coming into one of those times, or we're in one of those times where, you know, literally 60% of people are doing okay and 40% are really trying to make it work. And of course, of that 40%, some are doing fine, better than others, and some are perfectly happy and doing well. But it does lead to this incredibly challenging, bifurcated view of the world and view of the US Economy. This came out of a discussion today. The similarity of hospitals is 60% of health systems have some margin, 40% don't. By and large, the 6% that do are larger and more system wide than smaller. But you see these kinds of tale of two cities, tale of two countries playing out in many, many different ways in the economy. And I think we got to be mindful for it, of it as we look at these different things play out. In any event, thank you for listening to the Becker Business Podcast, the Becker Private Equity Podcast. I hope this makes sense to a lot of people. I hope it resonates with them. I don't have an answer to it, but I do find it to be a fascinating, fascinating situation. Thank you for listening to the Becker Business Podcast and the Becker Private Equity Podcast. Thank you very, very much.